Acct301

- CD ezto.mheducation.com/ext/map/index.html Week 4: Quiz Saved Help Save Rooney Company is considering the addition of a new product to Its cosmetics line. I he company has three distinctly different options. a skin cream, a bath oil, or a hair coloring gel. Relevant Information and budgeted annual Income statements for each of the products 2 follow. Relevant Information Skin Cream Bath Oil Color Gel Budgeted sales in units (a) 128, 090 208, 090 88,009 Expected sales price (b) 14 10 Variable costs per unit (c) points Income statements Sales revenue (a x b) $1, 152, 060 $1, 456,000 $1,232,600 Variable costs (a x c) 256,000) (832,030) (792,060) Contribution margin 896, 008 624, 030 440, 090 Fixed costs 693, 000) (495,020) (140,080) Net income $ 203,090 129,000 $ 300,600 Required: a. Determine the margin of safety as a percentage for each product b. Prepare revised Income statements for each product, assuming a 20 percent Increase In the budgeted sales volume C. For each product, determine the percentage change in net Income that results from the 20 percent increase In sales. d. Assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? e. Assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line? Complete this question by entering your answers in the tabs below. Req A Req B Reg C Req D to E For each product, determine the percentage change in net income that results from the 20 percent increase in sales. (Round your answers to whole percentage values.) Skin Cream Bath Oil Color Gel Percentage change in net income